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On Monday, Piper Sandler adjusted its outlook on Weatherford International plc (NASDAQ:WFRD), reducing the company’s price target to $82.00 from the previous $87.00 while maintaining a Neutral rating on the stock. The revision follows Weatherford’s fourth-quarter 2024 earnings report, which highlighted substantial challenges in Mexico and Russia that are expected to affect the company’s performance.
Derek Podhaizer of Piper Sandler noted the significant negative impacts stemming from operations in these two countries. Specifically, management indicated that activity in Mexico is projected to decline by 30-50% year-over-year and expressed caution regarding a potential recovery in the second half of 2025. Despite these challenges, InvestingPro data shows the company maintains strong financial health with a "GREAT" overall score and operates with moderate debt levels. Additionally, due to the combined effects of the situations in Mexico and Russia, Weatherford’s management has guided that international revenue will likely decrease by mid-single digits year-over-year, following last year’s 7.4% growth.
Despite these setbacks, there is a silver lining for Weatherford outside of the troubled regions. Excluding Mexico and Russia, the company’s revenue is anticipated to see an increase in the low single digits year-over-year. This is attributed to strong performance in the Middle East, which appears to be a growing market for Weatherford. The company’s financial strength is evident in its healthy current ratio of 2.01, indicating strong liquidity to meet short-term obligations. Get access to detailed analysis and 6 additional key insights about Weatherford with an InvestingPro subscription.
The lowered price target reflects the analyst’s recalibration of Weatherford’s financial models post the earnings announcement. The company’s difficulties in Mexico and Russia have prompted a more cautious stance on the stock’s short-term prospects, even as other areas of the business show promise.
Investors are now observing how Weatherford will navigate the challenges in the affected markets and whether the company’s strengths in other regions will be sufficient to offset the downturns. Weatherford’s management continues to monitor the situation closely, with hopes for a recovery in the latter half of 2025.
In other recent news, Weatherford International has seen changes in its stock price targets. The Benchmark analyst team, led by Chris Kuhn and Kurt Hallead, reduced the company’s stock target from $140 to $125, maintaining a Buy rating. They highlighted Weatherford’s increased margins and free cash flow, implying the stock may be undervalued.
Similarly, Citi analyst Scott Gruber revised Weatherford’s stock target twice. Initially, the target was lowered from $110 to $95 due to concerns about the company’s exposure to declining investments in Mexico and oil activity in Saudi Arabia. Subsequently, Gruber further adjusted the target to $90, reflecting concerns over a significant downturn in upstream spending in Mexico and potential reductions in activity in Russia.
Despite these adjustments, both Benchmark and Citi maintain a Buy rating for Weatherford’s stock, indicating a positive outlook. These are part of the latest developments surrounding Weatherford International.
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